WEST PALM BEACH (CN) - Florida businessman Harry Sargeant III and his partner in International Oil Trading Co. bribed Jordanian officials to get more than $1 billion in Pentagon contracts to deliver oil to the U.S. military in Iraq, a competitor says in a federal RICO claim. The plaintiff says a House committee accused Sargeant and IOTC of this "reprehensible form of war profiteering" in a report issued one week ago.
Supreme Fuels Trading, of the United Arab Emirates, sued Sargeant, his partner Mustafa Abu-Naba'a of the Dominican Republic, IOTC and the International Oil Trade Center.
They claim the defendants have bribed Jordanian officials since 2004 to get lucrative Pentagon contracts to supply the U.S. military in Iraq. Bidders must have a Letter of Authorization from Jordan, allowing them to transport the fuel across that country. The defendants allegedly bribed Jordanian officials to see that no one else would get such a letter.
"But for this scheme, plaintiff Supreme would have won the most recent Iraq fuels supply contract, awarded in 2007, which was worth more than $900 million," Supreme claims. It says the Pentagon was looking for an alternative to IOTC because of Sargeant's profiteering.
"Over the life of their conspiracy, defendants have caused the U.S. government to pay tens of millions of dollars more for fuel in Iraq than it otherwise would have paid if the bids had been subject to open competition," the complaint states. "The Committee on Oversight and Government Reform of the United States House of Representatives, in an Oct. 16, 2008 report to Defense Secretary Robert M. Gates, presented detailed evidence that IOTC has overcharged the U.S. government under these contracts. The Oversight Committee wrote that: 'Officials from the [United States Department of Defense] briefed Committee staff about allegations that the International Oil Trading Company (IOTC), which is owned by Harry Sargeant, had been overcharging the U.S. government under contracts to deliver fuel through Jordan into Iraq. If this briefing and the documents reviewed by the Committee are accurate, Mr. Sargeant's company appears to have engaged in a reprehensible form of war profiteering.'"
The complaint continues: "The Oversight Committee also noted that IOTC made a profit of more than $210 million under its contracts - at a profit margin of over 14% - netting at least $70 million for defendant Sargeant personally. Had the IOTC contracts been awarded instead to the lowest bidders, the Oversight Committee states, the taxpayers could have saved more than $180 million."
Named as a co-conspirator is Mohammad Anwar Farid Al-Saleh, the husband of Princess Alia Al Hussein, who is half-sister to Jordan's King Abdullah.
Supreme is represented by Ana Barnett with Stearns Weaver Miller of Miami.
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